Canada-EU trade accord is bridge to the 21st century

Trade Minister Ed Fast flies to Brussels Monday to begin the crucial, politician-to-politician round of the most important trade agreement Canada has negotiated in a generation.

A final accord on free trade between Canada and the European Union will no doubt end with a conversation between Prime Minister Stephen Harper and his European counterpart, Jose Manuel Barroso, president of the European Commission. But a deal, expected either late this year or early next year, represents "a hugely important step," says Len Edwards.

The former deputy minister of foreign affairs, who now is a strategic adviser for the law firm Gowlings, believes the successful conclusion of a Canada-EU CETA (Comprehensive Economic and Trade Agreement) would show the world that Canada means business about trade.

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"Europe is important, but some of the biggest gains lie elsewhere," Mr. Edwards said in an interview. They lie in the Pacific.

The last great leap Canada took in trade was with the United States 25 years ago. Since then, we have become cautious. The Chrétien government only reluctantly signed onto the North American free-trade agreement, which brought Mexico into the mix. While both Liberal and Conservative governments negotiated FTAs with such relatively minor players as Chile and Jordan, we placed most of our attention in the Doha Round of the World Trade Organization talks, even while fighting to protect supply-management practices for dairy and poultry within those talks. Such claims and counterclaims among nations appear to have doomed the Doha Round.

Meanwhile, trade negotiations with South Korea failed in part over complaints from the Canadian auto and shipbuilding industries. We spurned an initial opportunity to join the Trans Pacific Partnership talks, insisting that supply-management protections were sacrosanct. Canada developed an international reputation for timidity. Canadian politicians were unwilling to take risks for fear of destabilizing one of the many minority governments that dominated the last decade.

But the Great Recession of 2009 revealed how dangerous Canada's reliance on selling almost exclusively into the American market had become. The Harper government launched negotiations with the EU in May of that year. A deal is so close that the Tories spent last week trumpeting its benefits for such "iconic" exports as wheat and Tilley hats.

CETA is more comprehensive than the Canada-U.S. agreement. It would open up government procurement contracts to foreign bidders; toughen patent protection laws on pharmaceuticals; increase mutual access to financial services markets, lower some agriculture protections, and include a dispute-resolution mechanism to protect investors and governments.

In fact a Canada-EU agreement would look a lot like what a Trans Pacific Partnership agreement might look like. Those trade talks are the most important in the world. If they succeed, nations as diverse as Australia and Chile, Mexico and Singapore, the United States and Vietnam will be linked together in a powerful Pacific pact. Canada is now part of the TPP talks.

The message of CETA will also not be lost on the Indians, Chinese, Japanese and Thais, all of whom are in various stages of trade talks or talks-about-talks with Canada. There might even be a possibility of relaunching negotiations with South Korea.

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Beyond all that, a comprehensive agreement between Canada and the European Union would signal that the developed nations are not simply giving up, that North America and Europe remain determined to grow their way out of this prolonged slump through freer trade, rather than retreating behind tariff walls.

But for Canada, more than anything, this CETA is an all-important template. If, by the end of this decade, Canada has used that template to forge trade agreements throughout Asia and the Pacific, we will be in good shape for the 21st century.

That is why Mr. Edwards said getting the agreement signed and ratified is hugely important. A full generation after the last great gamble, Canada is ready for the next one.

John Ibbitson started at The Globe in 1999 and has been Queen's Park columnist and Ottawa political affairs correspondent.Most recently, he was a correspondent and columnist in Washington, where he wrote Open and Shut: Why America has Barack Obama and Canada has Stephen Harper. He returned to Ottawa as bureau chief in 2009. More

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